Welcome Guest. Register Now!  

LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 11-29-2008, 03:19 AM
TaxGuru's Avatar
Tax Guru
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,398
Blog Entries: 3
Would loan guarantees by a shareholder increase his basis in an S Corporation?

It appears that there are "no tax break for owners who guarantee loans to an S corporation." The Tax court has ruled that "Guarantees don’t increase owners’ deductible losses. That is, they do not contribute to the basis of the shareholder/owner of the S Corporation. This is very important as owners can only deduct losses in the S corporation to the extent of their basis.

In other words, the Owners of S companies can deduct losses only to the extent to what they invested in the firm, including any direct loans or advances they have made to the S Corporations!

Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.

Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
S-Corp's "Loan to Shareholder" = cap gain on sale? kieso S-Corporation 0 10-05-2008 06:08 PM
Loan to Shareholder/Employee Doctorisin S-Corporation 0 06-16-2008 01:58 PM
How can I increase basis in an LLC to be able to deduct my losses? Leah Limited Liability Company 1 04-06-2008 04:20 PM
Shareholder basis arcteryx S-Corporation 1 11-29-2007 04:52 PM
How do can one increase basis in an S Corporation? andri S-Corporation 1 04-04-2007 08:25 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 » Income
 » IRA/Sep
 » Medical
 » Payroll
Forum for CPAs
Financial Planning